European Metals Share Discussion Threads

[wassapper] 17/2/2017 09:37

Don't reply to him - we know why he is here. Just block him.

[bookwormrobert] 17/2/2017 09:05

Bandflex - in which case you have to ignore almost every statement ever put out by any miner or oiler.

The facts remain: this is a very large surface lithium resource in a medium cost stable jurisdiction near the car-making heart of Europe, and the costs of its extraction are almost 100% covered by the coextant tin and tungsten. In other words, it's paydirt.

[bookwormrobert] 17/2/2017 08:37

Hi Bandflex! That's a standard legal disclaimer - no more.

If you've shorted this share, my strong advice would be to cut your losses and GET OUT NOW!

[the guardian] 17/2/2017 08:23

Can't see this company being around for long. The likes of BHP will want the reserves.

[luisfrg] 17/2/2017 08:18

Rns..more good news

[bandflex] 17/2/2017 08:14

This is laughable, its supposed to be a mineral resource estimate yet it states-

"CAUTIONARY STATEMENT

The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource."

[bookwormrobert] 17/2/2017 08:05

Yoyo2money - there are several huge battery factories either being built or planned to be built in central Europe, including a Tesla Gigafactory. (Others can give the precise details, I don't remember them now).

It's also worth noting that the market leader in lithium battery technology is not necessarily Tesla - Swatch (Switzerland) have some really interesting new vanadium cathode developments which increase battery output by 30%.

[yoyo2money] 17/2/2017 07:55

"Cinovec is a globally significant lithium deposit. Its location on the German-Czech Republic border places it in very close proximity to the largest car manufacturers in Europe and is in a unique position to supply lithium to the rapidly growing European electric vehicle industry."

Any big EV battery factory in Europe? I know none.
I know there are a few in America and Asia.
This guy talks like he's next to Tesla Gigafactory.

[myst1] 17/2/2017 07:46

Hi Hutch_Pod,

I think you will need to change your figures based on that RNS! Much more indicated resource from inferred to include now.

[bookwormrobert] 17/2/2017 07:32

Hi Myst1 - thanks for sharing your calculations! (And I do think that this will come down to a buy-out auction after the PFS is published; this is simply too good a resource for the big boys to ignore).

[myst1] 16/2/2017 22:18

I don't think the $1000 will be far off, but all will be revealed soon in the PFS.

[hutch_pod] 16/2/2017 22:09

Thanks myst1 - yes I have indeed ignored the wider resource, and stuck to the annual production mentioned of 19.4kt lithium, 4.2kt tin, and 0.8kt tungsten.

The value also definitely looks much more impressive pre financing dilution and 'stage' discount.

Has the $1000 production cost been mentioned? I saw $1500 last, net of potash credit, albeit pre the recent optimisation.

[banshee] 16/2/2017 21:46

Right sorry, just skimmed it the saw the 35k figure which is the same as the total amt of tin, it is not their target lithium production which is 20ktpa. The development budget is currently 185million + 65 million extra for a Tin facility if I recall. Actual lithium producers generally trade on a p/e of 8-10 or so, so assuming they were in production at 20ktpa with a post tax profit of say $90-100mill you would expect them to be worth about $800million-$1billion, but that is after they raise the $250million and sufffer the normal problems/delays/cost overruns of getting into production.

No mineral price is 'guaranteed' long term, new battery/supercapicitor tech could impact lithium demand for example. Even the $1000 production figure for lithium is speculative and depends on new technology performing as hoped, tradtionally hard rock extraction of lithium costs a lot more. These various uncertanties are the reasons for the applied discount.

[myst1] 16/2/2017 21:15

Banshee,

The figures are for lithium.

[banshee] 16/2/2017 20:53

Where are you getting $1000 a ton production cost for tin, a few years ago they reckoned new underground tin mines needed a tin price of $40,000 a ton to be worth developing. EMH is presumably significantly less but $1000???

[myst1] 16/2/2017 20:29

Hutch pod,

Re your estimated value per share, you have ignored millions of tonnes of the wider inferred resource. Much of this is due to be upgraded to indicated before the end of the month (as advised by Keith in his latest interview). Also, have you taken account of the tin?

The following is an interesting post on valuations posted by Xulu on LSE:

Reworked figures to demonstrate the huge effect of the Lithium price rises.

35k tpa, $1000/t effective cost.

At $8000/t price = $245m/y profit. Over 20 years is $4.9bn profit in bank.
At $10000/t price = $315m/y profit. Over 20 years is $6.3bn profit in bank.
At $12000/t price = $385m/y profit. Over 20 years is $7.7bn profit in bank.

But with a simplified accumulating interest model at 5% over 20 years, our profits in the bank become:
At $8000 - $6.89bn
At $10000 - $9.44bn
At $12000 - $11.53bn

A reduced $169m Capex requirement that was identified in September over 20 years of an increased 8% discount rate becomes a total consideration of $788m.

Now weigh that up against the profits listed above as to how much the company will have in its bank after 20 years, and how much this is worth now.

i.e How much would you pay now to have $6.1bn left in the bank after 20 years at a secure 8% interest rate. Well let's work back the figure to see...

It comes out to $1.31bn at the lower $8000/t off take. Current contracts up to $15000/t.

If someone bought us out right now and paid $1.31bn it would be the same as if they put $1.31bn in a bank that gave them a guaranteed 8% return every year for 20 years. i.e an incredible deal for them. All these figures are in the buyers favour, not ours to provide them security in their investment.

However it's possible we go for a 25 year life of mine as we significantly reduced our Capex requirement, so the 8% discount rate doesn't hurt as much in a longer timescale. We could remain profitable for the extra 5 years. This is another significant add to the NPV.

Just for interest: If 25 year LoM - we are left with effectively $10.896bn in the bank after 25 years.

This is worth a buyout now at $1.6bn for a guaranteed 8% return over 25 years.

[luisfrg] 16/2/2017 19:34

Let's hope price improves in Aussie trade later

[weller130] 16/2/2017 19:29

Boom!! I'm excited for you and I really hope it comes in.